Measurements of drop size distributions in air-water annular flow have been made in a horizontal 0.0953 m pipe, at atmospheric pressure. A laser diffraction technique has been employed; using a Malvern Spraytec R5008 instrument. Stratification of the droplets has been observed by obtaining measurements at the pipe centre line, and 0.019 m above and below it. The stratification, which is caused by the effects of gravitational settling and the asymmetry of the liquid film, decreases with increasing gas velocity. Measured Sauter mean diameters at the pipe centre are similar to what has been observed in vertical pipes. However, they show a stronger effect of liquid flow rate than predicted by the correlation of Azzopardi, that was developed from measurements made with an earlier diffraction technique that did not account for multiple scattering. A log-normal or an upper limit log-normal distribution underpredicts the measured contributions of small diameter drops.